All Forum Posts by: JD Martin

There's no way mice have created inadequate insulation. Generally neither of these problems are insolvable. Moisture/water/mold is a tougher problem than mice. What you should do just depends on you, what you're spending for the property, how bad do you want it, what other opportunities are there, etc. 

 No doubt; both of my neighbors at my vacation house got "free" roofs from guys who roam around after any storm and document that whatever storm damaged their roof - despite the fact they both had 15+ year old 3 tab asphalt shingles in the central Florida sun. 

 LVP - luxury vinyl plank. I like smartcore from Lowe's, natural wood look with texture. Whatever you use, highest mil layer you can afford, 100% vinyl so that it's waterproof, use a good underlayment. 

 Keep good insurance and don't worry too much about it. Lawsuits are ridiculously rare in this business, despite what you might believe, and successful ones are even rarer. You do the best you can do using your own due diligence and your insurance company is going to do the rest for you. 

I've been sued 5 times - twice as a public official and 3 times by insurance companies. The total cost to me of all 5 suits was less than $1000. Exonerated 4 times, $0 cost, and the last one paid a $500 settlement plus my attorney's fees with no admission of wrongdoing on a $15k suit. So you really don't need to sweat being sued as much as you might think. 

 Why are you using a separate savings & checking account for each property? Not necessary. 

 Others have already answered the question but the short answer is nothing guarantees they will be made whole. That's why lienholders like to be in first position. You say it's not dangerous for the seller because they're only 20% at risk. $200k is a pretty good chunk of money to lose on a $1 million property unless they paid $50k or something stupid for it 40 years ago. 

Depending on your loan structure I'm not even sure you could legally offer a personal guarantee outside of the loan for that money without committing mortgage fraud, as anything that could hinder the ability of the primary lender to recover their principal is supposed to be declared during their diligence period, and any material changes up to the point of taking the loan are supposed to be disclosed as well. I think the only legal way a seller could get that assurance would be to close the loan in 2nd position, and after everything was recorded you sign a new promissory guarantee or other collateral in case of default. 

 Exactly what I was thinking of posting. Aside from disclosures, which I think can sometimes hinder a purchase or a sale, it's a lot harder to play dumb as a seller when you are a licensed professional. 

You really don't need a RE license if you're flipping a couple of houses a year. If you're going to go whole hog with several dozen a year as a business, it would probably make sense to have your own brokerage. 

We generally don't use co-signers unless there's a logical reason why the applicant might need a co-signer. That usually falls under they are either too young to have much credit history or are newly on their own (say someone who just got divorced or widowed). People who don't have logical reasons to need a co-signer other than they're poor applicants we reject. The majority of our renters that we do accept co-signers are students, with their parents as the co-signer. We don't accept co-signers that have no obvious relationship with the applicant. 

Just because the co-signer becomes financially liable for the lease doesn't mean you'll ever see a dime if you have to evict and try to collect later. 

Raising rent tends to be more of an art than a science. Strict adherence to what you believe are facts can run you into heavy vacancies before you know what happened. Bottom line is you have to have a solid grip on what properties rent for in your market - not only direct comps to what you have but also what's above and below you, because tenants can and will move based on affordability both ways ("downsizing" to save money or "upsizing" because an extra $50/100 gets them a much nicer place).

Once you intimately know what your market is, and what's available, you can compare what you are charging to those figures and adjust accordingly. The "art" part of it comes at minimizing turnover & vacancy while increasing revenue. In a really tight market, you might have leeway of hundreds of dollars before a tenant will even think about moving; conversely, in a loose market, even $50-100 might have a tenant searching for other digs (cheaper or better). One month of vacancy, other than in egregiously under-rent situations, typically wipes out a year or more of additional "market" rent, so you have to plan accordingly. If you have a solid, stable, multi-year tenant, that's paying close to market rate, they may be more valuable than someone paying a few points higher but is likely to move every year. 

Random thoughts:

1. Someone should have just screwed up a piece of drywall and primed it white over that hole until the summer came. That literally would have taken about 15 minutes and no ugly hole in the wall.

2. If you've kept putting them on one year leases, you should have left it M2M so you could just raise the rent when you needed to. If they are on M2M, easy answer is give them the discount and raise the rent to cover the discount. 

3. I hope you mean August 2024 was when the damage was. Because if you mean this happened in August 2023 and you just got around to it in October 2024 that's pretty irresponsible. 

4. Your margins are irrelevant to any issue of fairness. If you are making less money because you didn't raise rent or charge late fees, that's not the fault of the tenant. You can't reasonably use that as justification to refuse a fair request (I'm not passing judgement on whether the request is fair or not). 

5. If you put them in suitable housing during that time, they owe you the rent. If you put them in a one room studio instead of a 3br house, they are entitled to some recompense for loss of use.